Ch.3: Franchising

Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free. For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.
Businesses for which franchising works best have the following characteristics:

• Businesses with a good track record of profitability.
• Businesses which are easily duplicated.

Example:

1.    Name: Hilton Garden Inn

        Location: Hilton Garden Inn, 9336 Civic Center Dr., Beverly Hills CA 90210

      Link: http://hiltongardeninn1.hilton.com/en_US/gi/index.do?adId=hiltongardeninnhome,redirect

      Concept: Hotels

   






Introduction:

Hilton Garden Inn is a chain of hotels trademarked by the Hilton Worldwide. Hilton Garden Inns are considered to be moderate-scale mid-priced hotels that are designed for both business and leisure travelers. The hotel brand is similar to that of the Courtyard by Marriott brand, a key competitor. Similar to other Hilton brands, most Hilton Garden Inn properties are independently owned and operated, franchised under a licensing agreement with the Hilton Hotels Corporation.
   
    

2.Name: Choice Hotels Itnl.
   Location: Choice Hotels Itnl., 10750 Columbia Pk., Silver Spring MD 20901-4427
   Link: http://www.choicehotels.com/
   Concept: Hotels, Inns, Suites & Resorts






   Introduction:
Choice Hotels International  is a hospitality holding corporation which owns several hotel brands and is based in Silver Spring, Maryland. In 2008, Choice Hotels’ total revenue was $642 million, of which $637 million was from Franchise and $4.94 million was from Corporate Items.
The company was started in 1939 in Maryland as Quality Courts United, a referral chain consisting of about seven motel owners. Later, the motel chain operated simply under the name Quality Motels (1969–71) and Quality Inns (since 1972). Quality Courts United accepted franchise hotels without strict norms or guidelines from the company. This is different from Holiday Inn which from their early beginnings implemented numerous mandatory standards and guidelines (e.g. room size and amenities) at every one of their locations. Also, Quality Inn accepted franchisees with existing hotels.
    


3. Name: Country Inns & Suites by Carlson
  Location: Country Inns & Suites by Carlson, P.O. Box 59159, Carlson Pkwy., Minneapolis MN 55459-8200
   Link: http://www.countryinns.com/
  Concept: Mid-tier Hotels



  Introduction:
Carlson (often referred to by its previous name Carlson Companies) is a privately held international corporation in the hotel, restaurant, and travel industries. Headquartered in Minnetonka, Minnesota, near Minneapolis, Carlson brands and services, including franchised operations, employ about 150,000 people in more than 150 countries and territories. The company's 2008 sales, including those from franchised operations, totaled $38 billion. It is one of the largest family-held corporations in the country.